Advertisers Keep Disbursing Funds To TikTok Despite Being Threatened With Blocking US

TikTok will announce a new ad format. (photo: twitter @tiktok_us)

JAKARTA - Advertisers are committed to continuing to issue advertising budgets on TikTok despite threats of bans in the United States for national security reasons. The statement came from advertising observers.

This denial comes as TikTok, which is owned by Chinese tech company ByteDance, is struggling to prevent a ban in the United States after lawmakers introduced a bill that powers US President Joe Biden's administration to ban applications that pose security risks. The short video app has been banned from government phones in several countries.

TikTok hosted a presentation for advertisers on Thursday night 4 May in New York as part of NewFronts, an annual event where social media platforms and video streaming reveal new content and features for marketers.

Despite concerns about China's holdings, the TikTok advertising business is expected to grow 36% to $6.83 billion this year, according to research firm Insider Intelligence.

Ryan Detert, CEO of Influential, an influencer marketing firm, said his company's clients "no one said 'don't spend money on TikTok,'" he said.

"In this case, we don't see any contamination," Detert added. Influentials have worked with brands like Pepsi and the NFL.

Two media buyers from two different major advertising agencies told Reuters that Washington's surveillance of the app had not affected their client's plans on TikTok. The two buyers spoke on condition of anonymity to discuss relations with TikTok.

At its presentation on Thursday, TikTok will announce a new ad format that will allow brands to place ads next to content from publishers such as BuzzFeed, Dotdash kiosk, and NBCUniversal, as well as provide 50% of ad revenue to the publisher.

"TikTok is irreplaceable except and up to (advertisers) must replace it," said Mark DiMassimo, founder of creative agency DiMassimo Goldstein, who has worked with brands like Hello Fresh and Samsung.

However, some media buyers admit that the threat of bans in the United States will become an "indoor elephant" during advertiser presentations.

On Tuesday, May 2, TikTok announced the US head of trust and security will leave the company next week, leaving the app behind a key executive who oversees content moderation and the development of security equipment for divisions that hold US user data.

"There is a lot of uncertainty combined with general uncertainty about the economic situation," Stephani Estes, chief media officer at the digital marketing agency Goodway Group. "You have to consider the possibilities."

TikTok says it is addressing advertisers' concerns "directly in open, fact-based and sustainable dialogue.